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Gulf Oil Corp Takeover Financial Analysis Case Study Help


Gulf Oil Corp Takeover Financial Analysis Financial Analysis Case Study HelpThe monetary position of Gulf Oil Corp Takeover Financial Analysis can be assessed by having a look at its ratio analysis.

Declining Profitability:

We can see in appendix 1 how the earnings has been declining for many years after 2005. The fact that the gross earnings margin has reduced as well suggests that the expense of sales have actually not gone down at the exact same rate. The decreasing web profitability, revealing a negative pattern from 2006 to 2007 recommends that costs have increased even more than the business is able to manage provided its existing resources. With a long term debt contributing to the interest expenditure, Gulf Oil Corp Takeover Financial Analysis remains in alarming requirement of an alternative revenue stream.

Declining Liquidity:

Decreasing Liquidity: We can see a significant declining pattern in the current ratio too revealing a fall in liquidity which is another point of concern for Gulf Oil Corp Takeover Financial Analysis especially as it has a long term financial obligation to pay off. With the existing possessions not in a position to pay off the current liabilities, we can see how the company would be in a significant monetary problem unless the capital improves with additional sources of finance.

Rising Debt to Assets Ratio:

We might explore the monetary condition of Gulf Oil Corp Takeover Financial Analysis further by taking a look at the company's total debt to total possessions ratio in appendix 2. We can see how the total properties of the business have actually been decreasing from 2005 onwards. Nevertheless, the long term financial obligation has stayed at $160 million while the short term financial obligation has increased side by side. Such a situation has brought Gulf Oil Corp Takeover Financial Analysis to a point where its total debt to overall assets ratio has increased. An increasing total financial obligation to total properties ratio recommends that the risk has actually increased in regards to the company's properties not sufficing to cover its overall liabilities. This might not be showing the total liquidity position however provides clearness in regards to the total monetary position of the company.

/Financial Feasibility